Immigration Reform Could Be A Boon To U.S.-Born Workers, Experts Say

Posted:
01/30/2013 4:12 pm EST
Updated:
01/30/2013 4:21 pm EST

WASHINGTON, DC - NOVEMBER 08: Antonia Pena, from Colombia, chants during a rally with on immigration reform in front of the White House on November 8, 2012 in Washington, D.C. Immigrant rights organizations called on President Barack Obama to fulfill his promise of passing comprehensive immigration reform. Economists say such reform could be a boon to the U.S. economy, as well as American workers. (Photo by Mark Wilson/Getty Images) | Getty Images

Business leaders are pushing Congress and President Obama to move forward with broad proposals for immigration reform, hailing the measures as an opportunity to expand the U.S. workforce. But another group stands to benefit as well: American workers.

Despite the common political narrative that immigrants cost American workers jobs and drive down wages, new arrivals to the United States actually deliver a modest bump in wages to all workers, according to a report from the Hamilton Project, an economic policy initiative of the nonpartisan Brookings Institution. The report found U.S-born workers see an increase of between 0.1 and 0.6 percent in their wages on average with a boost in immigrants.

Immigrant workers also bring skills with them that can often complement those of American workers, creating new jobs. In addition, the overall increase in population means growth in demand for goods, which in turn means more production and more money available for businesses to hire more workers.

“It makes the pie larger,” Michael Greenstone, director of the Hamilton Project, told The Huffington Post. “When immigration is comprised of people who are not exactly the same as people who are in the U.S., or there are opportunities for new amounts of capital, then there doesn’t have to be this negative impact on wages.”

That doesn’t mean everyone is a winner. The same report notes some estimates show that low-skilled workers, who compete the most directly with immigrants for jobs, can actually see their wages fall by as much as 4.7 percent due to increased immigration.

“I find the evidence pretty persuasive that low-skilled immigration has driven down the wages of low-skilled U.S.-born workers,” Gregory Hanson, a professor at the University of California at San Diego, told HuffPost.

Still, those low-skilled workers should be cheering lawmakers’ proposals to create an easier path to citizenship for undocumented immigrants, Hanson says. Undocumented workers vie with native workers for low-paying jobs in janitorial and food services; once they become citizens, they're more likely to pursue better-paying jobs, cutting down on competition and giving them more money to spread around the economy.

“Some of those individuals will do really well in the U.S. economy, but only if they’re no longer undocumented workers,” Hanson said.

Pia Orrenius, a senior economist at the Federal Reserve Bank of Dallas, said once undocumented workers gain citizenship, their wages will also likely go up, pushing up the wages of native workers.

“Native workers say [undocumented workers] have been undercutting our wages because they’ve been underpaid,” Orrenius said. “Now it will be more of an even playing field.”

While debate remains in the economic literature as to whether immigration helps or hurts the wages of American workers, it’s clear that the effect is relatively small. And it’s unlikely immigration reform would have a major effect on the current labor market, Orrenius says, because the economy has already adjusted to the immigrant population.

Still, an increase in immigrants would have an outsized effect on one group of Americans: high-skilled workers. Companies like Microsoft and Facebook have hailed immigration reforms that allow in more high-skilled immigrants that they say are needed to fill certain jobs. With those those personnel needs met, the companies can produce more and create new jobs for other high-skilled workers, Orrenius said.

In addition, if more immigrants are available to take on certain low-skilled work, more high-skilled U.S.-born workers can outsource jobs like childcare and head into the workforce, Robert Smith, an economics professor at Cornell University said.

At the end of the day, the biggest winners in the event of more immigration are businesses and consumers.

“Everyone is a consumer and we all benefit, because when you have more labor and labor costs go down, things are cheaper,” Orrenius said. “We as consumers have been spoiled by lots of immigration driving down the prices of goods.”

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Controversial Immigration Laws

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California's Proposition 187 was submitted to the voters with the full support of then Republican governor Pete Wilson. It essentially blamed undocumented immigrants for the poor performance of the state economy in the early 1990s. The law called for cutting off benefits to undocumented immigrants: prohibiting their access to health care, public education, and other social services in California. It also required state authorities to report anyone who they suspected was undocumented.
Status: The law passed with the support of 55 percent of the voters in 1994 but declared unconstitutional 1997. The law was killed in 1999 when a new governor, Democrat Gray Davis, refused to appeal a judicial decision that struck down most of the law. Even though short-lived, the legislation paved the way for harsher immigration laws to come. On the other hand, the strong reaction from the Hispanic community and immigration advocates propelled a drive for naturalization of legal residents and created as many as one million new voters.

The Arizona Act made it a misdemeanor for an undocumented immigrant to be within the state lines of Arizona without legal documents allowing their presence in the U.S. This law has been widely criticized as xenophobic and for encouraging racial profiling. It requires state authorities to inquire about an individual's immigration status during an arrest when there is "reasonable suspicion" that the individual is undocumented. The law would allow police to detain anyone who they believe was in the country illegally.
Status: The law was signed into law by Arizona Governor Jan Brewer on April 23, 2010. But it has generated a swirl of controversy and questions about its constitutionality. A federal judge issued a ruling that blocked what critics saw as some of the law's harshest provisions.
House: 35-31 (4/12/2011)

The controversy over Arizona's immigration law was followed by heated debate over Georgia's own law. HB 87 required government agencies and private companies to check the immigration status of applicants. This law also limited some government benefits to people who could prove their legal status.
Status: Although a federal judge temporarily blocked parts of the law considered too extreme, it went into effect on July 1st. 2011.
House: 113-56
Senate: 39-17

This bill, which was approved in 2010, bans contractors and subcontractors employ undocumented workers from having state construction contracts. The bill also protects employees who report construction sites that hire illegal workers. To ensure that contractors hire legal workers, the law requires employers to use the identification verification system E-verify, based on a compilation of legally issued Social Security numbers.
Status: Approved on June 8th 2010.
House: 188-6 (07/08/2010)
Flickr photo by DonkeyHotey

Many states tried to emulate Arizona's SB 1070 law. However, most state legislatures voted against the proposals. Utah's legislature managed to approve an immigration law based on a different argument. Taking into consideration the criticism of racial profiling in Arizona, Utah required ID cards for "guest workers" and their families. In order to get such a card workers must pay a fee and have clean records. The fees go up to $2,500 for immigrants who entered the country illegally and $1,000 for immigrants who entered the country legally but were not complying with federal immigration law, according to the LA Times.
Status: Law went into effect on 03/15/2011
House: 59-15 (03/04/2011)
Senate: 22-5 (03/04/2011)

Florida's immigration law prohibits any restrictions on the enforcement of federal immigration law. It makes it unlawful for undocumented immigrants within the state to apply for work or work as an independent contractor. It forbids employers from hiring immigrants if they are aware of their illegal status and requires work applicants to go through the E-verify system in order to check their Social Security number.
Status: effective since October 1st, 2010

The new immigration law in Alabama is considered the toughest in the land, even harder than Arizona's SB 1070.
It prohibits law enforcement officers from releasing an arrested person before his or her immigration status is determined. It does not allow undocumented immigrants to receive any state benefit, and prohibits them from enrolling in public colleges, applying for work or soliciting work in a public space. The law also prohibits landlords from renting property to undocumented immigrants, and employers from hiring them. It requires residents to prove they are citizens before they become eligible to vote. The law asked every school in the state to submit an annual report with the number of presumed undocumented students, but this part, along with others, were suspended by federal courts.
Status: Approved June 2nd, 2011
House: 73-28 (04/05/2011)
Senate: 23-11 (05/05/2011)
Flickr photo by longislandwins